Bankruptcy Shadows Detroit’s Mayoral Election

DETROIT (AP) – A candidate once thought to have little chance of getting past Detroit’s primary election is the front runner Tuesday in the race for mayor, a job that will have little immediate power as the debt-ridden metropolis is guided through the largest municipal bankruptcy in U.S. history by a state-appointed emergency manager.

One of the top remaining issues for both candidates: Who can better work under the thumb of turnaround expert Kevyn Orr, who will continue to run the show for at least another year in Detroit – a city where population has dropped from 1.8 million people to 700,000, and political corruption and mismanagement have contributed to its ultimate financial demise.

Benny Napoleon and Mike Duggan have said they oppose state intervention in Detroit’s affairs and the hiring of Orr to run its finances.

Duggan, an ex-county prosecutor and former chief of the Detroit Medical Center, said he wants to convince Orr’s boss, Gov. Rick Snyder, to allow him to develop a team and a plan to resuscitate the city’s fiscal condition if elected mayor.

Despite being kicked off the August primary ballot due to a residency issue, Duggan received more than 48,700 write-in votes. Napoleon, Wayne County’s sheriff and a former Detroit police chief, was on the ballot and received about 28,300 votes.

Current Mayor Dave Bing did not seek re-election. He remains opposed to Detroit having an emergency manager and says Orr hasn’t communicated well with the mayor’s office.

A poll released last week showed Napoleon lagging well behind Duggan, who also holds an almost 3-to-1 fundraising and spending edge. A win would make Duggan Detroit’s first white mayor since the early 1970s. The city is more than 80 percent black.
Napoleon and Duggan have campaigned on fixing Detroit’s deteriorating neighborhoods and reducing the high crime rate in a city that struggles to respond to 911 calls on time. Detroit has more than 30,000 vacant houses and buildings. Bing’s administration has demolished about 10,000 empty and dangerous houses during his four-year term.

But Orr must OK anything the new mayor wants that requires money.

“I think they’re kidding themselves if they think they are going to regain financial control of this city,” said Detroit-based bankruptcy attorney Kenneth Schneider. “Even after Kevyn Orr, there will be a financial advisory board that will maintain control of the city’s finances indefinitely. The first part for any new mayor is to accept that and work with the state on how to right this city’s finances.”

The AP left a message last week with Orr’s office to ask how he plans to work with the newly elected mayor in January.

Snyder has not endorsed a candidate, but after testimony last week in bankruptcy court, Snyder held firm in his decision to appoint Orr and keep him in place until Detroit emerges from bankruptcy and its finances are fixed.

“Detroit’s fiscal crisis was six decades in the making,” Snyder said in a statement. “My job is to make the tough decisions to resolve the problems we face today, not ignore them.”

In June, Orr asked banks, city unions and other creditors to accept pennies on the dollar for debt owed by the city. He filed for bankruptcy a month later and says Detroit’s debt is at least $18 billion. He is in mediation with the city’s two pension systems and has announced cutbacks in health care insurance for retirees and current employees.

Meanwhile, the city is currently in the midst of an extraordinary trial that brings the bankruptcy case to its most crucial stage. If a judge finds certain legal requirements were met, the city would get the green light to restructure its debt and possibly slash pensions for thousands of people.

Detroit’s mayor cannot remove Orr. Under state law, that only can be done by the governor or an act of the state legislature. However, once Orr’s 18-month contract ends, a supermajority vote by the city council and mayor can choose not to renew it.

“I don’t understand how anyone could suggest that citizens of the city of Detroit should be happy about having a person imposed upon them who has absolutely no vested interest in the outcomes of the actions they take,” Napoleon told business leaders last month during an economic club luncheon. “No one has the ability to say, `Wait a minute, Mr. Orr, this is not in the best interest of this community.”‘

Up to 25 percent of Detroit registered voters are expected to cast ballots Tuesday. Voter turnout for the 2009 general election was 22 percent.

Duggan’s committee reported more than $2.55 million in contributions and about $2.51 million in expenditures through Oct. 20 for the current election cycle. Napoleon’s committee reported contributions of just under $870,000 and expenditures of nearly $866,000.

Danielle Fuquay, a 37-year-old college admissions representative who plans to vote for Duggan, is bothered that the new mayor’s power will be limited as long as Orr is in Detroit, but said the emergency’s manager’s existence was “necessary” given the city’s troubled financial condition.

“If we’re going to have both, I feel they should work together,” Fuquay said.

Theo Broughton favors Napoleon and said the new mayor should work just as hard at getting rid of Orr as improving neighborhoods and fighting crime.

“I didn’t want him here in the first place,” Broughton said of Orr. “The emergency manager is here illegally. He’s making decisions that are illegal.”